The four-day working week: What HR and People leaders need to know

We’re all obsessed with telling people how busy we are. We love to wax lyrical about how there are never enough hours in the day for everything we need to do. However, this can heavily impact on many employees’ holy grail: work-life balance. Yet, longer hours don’t necessarily mean greater productivity. Sage research reveals one in three full-time employees admit to being productive for less than 30 hours a week. That’s a whole day lost per working week. In fact, despite working some of the longest hours in the Western world at 32.7 per week, Australia sits at number 14 in the OECD productivity rankings – far below Luxembourg at top spot, where the working week is only 29 hours. The Institute for Labor Economics says that working longer invokes the law of diminishing returns, with productivity dropping after the 35th hour of weekly work. Aidan Harper, researcher at the New Economics Foundation says there’s a clear relationship between overwork, poor wellbeing, mental illness and poor productivity. “All of these things are very, very closely linked, and overwork is pretty awful for you in terms of mental health and your ability to a) work quickly and b) produce a high quality of work,” he explains. So, are we better off losing that fifth day at work all together? A four-day working week not only makes workers happier, but more productive too according to recent studies. Plus, a 2015 national survey found 26% of all employed Australians would prefer to work fewer hours.

What examples are there of the four-day week working successfully?

In Australia, digital marketing company Versa trialled a four-day working week, allowing employees to take every Wednesday off. A year after implementing the initiative, the company’s profit almost tripled and revenue grew by 46%. In New Zealand, wills, trusts and estates company, Perpetual Guardian, trialled a four-day week for two months, resulting in a 20% increase in productivity. In the US, a technology start-up called Wildbit, founded by former Google employees, switched to a four-day week after its CEO, Natalie Nagele, learnt that most people can only really do around four hours of meaningful, cognitively focused work in a day. “I looked at that and said, okay, as a team, where can we cut back,” she explains. “If we can do the same work in 32 hours and get an extra day off, that would be beneficial to our personal lives and our ability to recharge, so let’s just test it out.” Possibly one of the most surprising examples of the four-day week is for Japanese car company, Toyota. Their Swedish car factory saw increased customer satisfaction alongside higher productivity. The factory cut its staff’s weekly hours from 40 to 30 and saw a productivity uplift of 114%, which increased profits by 25%. Managing Director of the factory, Martin Banck, said the shift to shorter hours resulted in significant positive change. “Staff feel better, there is lower turnover and it is easier to recruit new people. They have a shorter travel time to work, there is more efficient use of the machines and lower capital costs—everyone is happy.”

What do HR and People teams need to know to implement a four-day working week?

For companies considering the swap to a four-day working week, the advice is to implement a trial before pushing out company wide. Whether a four-day working week is right for your company depends on many factors:

• Do employees want to reduce their hours?
• How would working different, or longer hours, affect childcare?
• Is your business set up to allow for this different working pattern?
• Would you be able to implement this fairly across all areas of the company?

Flexibility is a fantastic benefit that should make your company more desirable to talent. However switching to a four-day working week could be a big change, so you might want to consider other flexibility options first. Also, it may not be what your employees want. Ask them what would make them more productive; don’t assume. Would they rather the flexibility to manage their own hours across the week? Or to work from home? The only way you’ll know is if you ask them. Such initiatives can help create a happier and more productive workforce – without necessarily switching to a four-day working week.